Technology Changes to Supply Chains Demand Good Leadership

By Kevin Glynn, VP and CIO, DSC Logistics

Our work in supply chain is changing rapidly as we implement new technology. Our leadership challenge as CIOs and IT leaders is not only to describe what the new technology will do, but also to help people understand how their jobs will change.

CIOs have a clear opportunity to lead in a major way. This is the best moment we’ve ever had as a profession to step out from the background and be responsible for both the technical solution and the roles our employees will have in the future.

We should acknowledge that existing technologies, from mobile apps and small applications to improved packaged software, are eliminating clerical jobs at an accelerating rate. An easy way to separate new technology effects from current development is to measure how much paper is needed in a supply chain, and then calculate how paperwork elimination will change clerical jobs. Changes from the implementation of electronic BOLs, e-signature, apps to register drivers, even the tried and true EDI, are evolutionary change; new technologies will revolutionize roles.

As we implement Artificial Intelligence programs that eliminate analyst jobs, introduce augmented reality that makes direct labor more productive, install automated vehicle technology that decreases our need for drivers and fork lift operators, and fly drones to count inventory, IT leaders are in the best position to define the new roles for people, and, just as importantly, describe the roles that will go away.

"Implementing Artificial Intelligence (AI) in supply chains may have the broadest effect on how we manage the supply chain"

Implementing Artificial Intelligence (AI) in supply chains may have the broadest effect on how we manage the supply chain. Roles and tasks, sequences of work will all be altered as we develop new AI algorithms. Much of the indirect labor throughout the supply chain will be eliminated over time as we develop the algorithms. However, it’s really easy to start an AI project and the ROI on this is clear. Our challenge as leaders is to help everyone understand their jobs are being irreversibly changed and eliminated.

Perhaps more obvious than AI, driverless vehicles will also radically alter the employment landscape. Truck drivers and forklift drivers will be eliminated within the next 5-10 years as we replace our fleets with autonomous trucks and lifts. We already have high turnover and shortages in this area and it may get worse as fewer people enter the profession. The CIO’s role here is to accelerate the testing and integration of these vehicles as fast as possible. In this case the message is to implement faster, to push outside the comfort zone.

Drones, as sexy as autonomous vehicles to some, promise to change how we count inventory, how we track trailers and trucks and, of course,how we deliver material. Drone usage will likely be automated—no pilots needed. For example, if we can fly drones throughout a warehouse to conduct inventory, then the inventory control function radically changes. Not only will we not need inventory counters, we will need fewer analysts. Frequent counting via drones ensures greater accuracy and, coupled with AI inventory algorithms, reduces the number of analysts needed. We’ll need good analysts as we get drone flights under control; the ethical approach is to talk to the analysts about how drones coupled with AI will affect their jobs.

Blockchains in supply chain are coming, and not just in the form of payment options. The use of blockchains to guarantee traceability and assure quality is already being tested. Blockchains change how a quality department functions; much of these folks spend time reporting, and blockchains significantly reduce the need for documentation. QA teams will see the opportunities and threats of blockchains immediately.

We have been conditioned to carefully avoid telling people their jobs are going to be lost, until the last minute when the loss is inevitable. With so much change coming, the idea that we’ll keep things a secret among a small group of implementers seems impractical. The tactics of implementation and rollout demand participation from our operations colleagues. We need their input to be successful and that requires our transparencyto paint the complete picture, including job loss.

We have been taught that if we tell people their jobs are going away, many will leave earlier than we want. They will see what’s coming and take their own actions to find new work, leaving the company short of manpower before the technology is ready to implement. Many groups have used a ‘stay’ bonus or other incentives to keep people in position until the new project really makes them redundant. However, we shouldn’t think about these projects as huge milestone events; the changes will happen gradually.

Incremental improvements are easier than the horrific ‘big bang’ cutovers we have all grown to dread, and most IT groups, and increasingly non-IT teams, develop and run projects using Agile. Being Agile means people can see what’s coming. New technology installed in small increments forces transparency. Instead of shying away from the conversation about what’s to come or hiding behind the fear of people leaving early, we should embrace the conversation. Agile allows for deviations and adaptation to a master plan and,in engaging employees, the adaptations will likely be better and more widely accepted. Equally, having these conversations will keep people engaged longer–while most people fear losing their jobs, they also want to be part of a solution.

There are always those who will not participate, who will leave early because of fear. But this negative group isn’t likely to be much help with implementation anyway. The challenge for leaders is to continue to communicate, no matter what the level of engagement, and hope that levels of engagement can change for the better. Engagement, even if it means discussing job loss before we are completely ready, is better than keeping pending changes a secret.

This is our chance to make ourselves easy to follow. Our chance, as CIOs and IT leaders, to make a difference depends not only on our ability to execute on technical projects but also on our willingness to engage and assist our colleagues. I believe we have an ethical duty to the people we work with to explain what is coming, to help them understand the future and the threats. As CIOs,we have the duty of describing technology to our Board, executive colleagues and the rest of the company, customers and vendors. And, we also need to extend our communication obligation to those directly impacted by our work.